If you want warm and cuddly treatment from Marriott, register as a guest. Laurence Geller, the restive owner of the opulent Ritz-Carlton Laguna Niguel, found that out the hard way. Geller had a raft of complaints about Marriott International, which owns the Ritz name and operates his hotel for around $4 million yearly. He was tired of Marriott's high fees, its secrecy about the hotel's finances and its foot-dragging on a renovation.

Marriott's response? It began developing a Ritz clone just three miles up the California coast. This 262-room hotel competes head-on with Geller's Ritz, even copying, Geller says, his Ritz's silver-white Italian marble bathrooms. An apoplectic Geller sued for damages from lost bookings and unfair business practices in a Los Angeles court two years ago. The case is pending. Meanwhile, he's stuck with 16 years to run on his Marriott contract in Laguna Niguel.

Two Marriott luxury hotels so close together. Isn't cannibalizing a risk? Not to Marriott. The company makes its money mainly from fee income. Managing two hotels on a prime stretch of Pacific coastline would increase Marriott's bottom line even if neither property made money for the owners. That's the beauty of being a hotel franchisor or operator, which Marriott is, rather than an owner of hotel buildings, which Geller is.

Populated by hard-nosed executives, Marriott has become the industry leader by obsessively whipping its troops into line--not just employees, but hotel owners--while pampering loyal customers and winning bookings away from rivals. The hotel behemoth has exploited its size advantage as ruthlessly as a Microsoft or a Wal-Mart. That has allowed Marriott to recover nicely during the lodging downturn of the past three years, while its rivals floundered.

Hotel owners with Marriott flags on their buildings pay the industry's highest fees and put up with the company's reluctance to disclose operating costs, its use of Marriott-controlled suppliers who allegedly cut owners out of purchase rebates and its cavalier willingness to plunk another Marriott nearby. The vast majority take their lumps because they do better under Marriott's aegis than they would under anyone else's.

You don't like the terms? A hundred hotel owners are aching to take your place.

Dissident owners who want better treatment get swatted down. Six of ten owner lawsuits brought in the last four years were settled or dismissed, and Marriott has intimidated many other owners from squawking. "We haven't lost any yet," crows Bill Marriott. But the lodging leader faces serious challenges from Geller, who has three Marriott properties, and from another owner, Hong Kong developer Henry Cheng Kar-shun, who holds 65 hotels, most bearing Marriott's Renaissance nameplate. In their separate suits the two owners argue that Marriott has, much like a stockbroker, a "fiduciary duty" to them. Thus it should manage a hotel's finances to get the owner the best deals available on the open market. Starwood Hotels & Resorts (Sheraton, St. Regis, Westin) has lost a legal battle on similar grounds. Hilton Hotels (Hilton, Doubletree, Embassy Suites) and Marriott have not.

With their deep pockets and angry determination Geller and Cheng show every sign of staying the course against juggernaut Marriott. K.C. McDaniel, a lawyer with New York law firm Katten Muchin Zavis Rosenman who represents an owner in a case against Marriott, says a Cheng or Geller victory would "have a domino effect" that would thwart Marriott's ability to strong-arm owners.

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